Someone just yanked the emergency brake on US macro shorts—biggest short covering since the taper tantrum era. Looks like macro traders finally remembered gravity exists.
A near +10% spike in EPU on already-elevated levels is a macro signal, not a lagging indicator. Combine this with:
•SMT divergence in U.S. bonds
•Bid in gold and vol assets
•Fragile risk sentiment
& you’re looking at the early innings of a potential regime transition.
Looks like the US just rage-quit economic certainty. Europe’s just a little stressed out here, and meanwhile, the uncertainty index in America just went vertical. Someone check if the Fed swapped interest rate policy for roulette.
It appears the “vibes” economy also finds itself in recession — consumer sentiment crashing off the cliff, small businesses panic-spiking, homebuilders are down in the dumps, and inflation expectations reverted all the way back to 1993. Soft landing?